Mayberry Misleads on Medicare

In a new TV spot from the Obama administration, actor Andy Griffith, famous for his 1960s portrayal of the top law enforcement official in the fictional town of Mayberry, N.C., touts benefits of the new health care law. Griffith tells his fellow senior citizens, "like always, we’ll have our guaranteed [Medicare] benefits." But the truth is that the new law is guaranteed to result in benefit cuts for one class of Medicare beneficiaries — those in private Medicare Advantage plans.

The White House released the ad on the 45th anniversary of the Medicare program, and said it would run nationally on cable TV networks. Griffith, whose "Andy Griffith Show" was a TV comedy hit at the time Medicare was first enacted in 1965, explains the "good things" that the new health care law will mean for Medicare beneficiaries.

"This year, like always, we’ll have our guaranteed benefits," he says. An announcement of the ad on the White House website reinforces that claim, saying: "Under the Affordable Care Act … Seniors guaranteed Medicare benefits will remain the same." But the truth is, for millions of seniors, benefits won’t remain the same.

Medicare Actuary Richard Foster: The new provisions will generally reduce MA rebates to plans and thereby result in less generous benefit packages. We estimate that in 2017, when the MA provisions will be fully phased in, enrollment in MA plans will be lower by about 50 percent (from its projected level of 14.8 million under the prior law to 7.4 million under the new law).

Even the head of the White House Office of Health Reform, Nancy-Ann DeParle, acknowledges that Medicare Advantage benefits are going to be reduced. "I’m sure that some of those additional benefits have been nice," the Wall Street Journal quoted her as saying in a July 25 report. "But I think what we have to look at here is what’s fair and what’s important for the strength of the Medicare program long term."

A Weasel Word

So how can the Obama administration claim that "guaranteed Medicare benefits will remain the same"? The answer is that the term "guaranteed" is a weasel word — a qualifier that sucks the meaning out of a phrase in the way that weasels supposedly suck the contents out of an egg. It may sound to the casual listener as though this ad is saying that the benefits of all Medicare recipients are guaranteed to stay the same — and that may well be the way the ad’s sponsors wish listeners to hear it. But what the administration is really saying is that only those benefits that are guaranteed in law will remain the same.

There’s even a section in the new law (section 3601) that says: "Nothing in the provisions of, or amendments made by, this Act shall result in a reduction of guaranteed benefits under title XVIII of the Social Security Act" (the title that establishes the Medicare program). Section 3602 says even Medicare Advantage recipients won’t suffer any reduction of "any benefits guaranteed by law."

But here’s the catch: The extra benefits generally offered by Medicare Advantage plans aren’t guaranteed by law. They are offered by private insurance companies as inducements. The companies have been able to offer somewhat more generous packages than traditional, fee-for-service Medicare because the system pays them as much as 40 percent more per patient than it pays for traditional Medicare, according to the chief actuary. The average in 2009 was about 14 percent more, according to the most recent analysis by the nonpartisan Kaiser Family Foundation, issued in February. But the new law generally eliminates the extra payments in the coming years. Foster, the chief actuary, estimates that federal spending for Medicare Advantage will be reduced by $145 billion over the law’s first decade.

Currently, about 1 in every 4 Medicare beneficiary is enrolled in a Medicare Advantage plan. For many of them, the words in this ad ring hollow, and the promise that "benefits will remain the same" is just as fictional as the town of Mayberry was when Griffith played the local sheriff.